Pursuant to subsection 1 of § 48 of the Income Tax Act, employers pay income tax on fringe benefits granted to employees.
Based on clause 7 of subsection 1 of § 2 of the Social Tax Act, social tax is paid on fringe benefits within the meaning of the Income Tax Act, expressed in monetary terms, and on income tax payable on fringe benefits.
Declaration
The period of taxation of fringe benefits is one calendar month. The employer declares the fringe benefits granted to employees and income and social tax calculated on fringe benefits during a calendar month in Annex 4 of the form TSD, which must be submitted together with the form TSD to the Tax and Customs Board by the 10th day of the month following the calendar month in which the fringe benefit was granted. The tax amount is paid to the bank account of the Tax and Customs Board by the same date at the latest.
Legal basis
Handbook - taxation of fringe benefits
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Keeping driving records
It is not possible to reimburse private rides based on accounting and therefore keeping a logbook of driving records is not necessary. However, if the employer wants to prove that the car is used only for business purposes and business rides, it is possible to keep a logbook (for example, electronic GPS-driving records or the like).
If it is certified that the employer allows the car to be used only for business rides, no fringe benefit will arise. As the taxation of fringe benefits does not depend on the use of the car for private rides and private journeys cannot be compensated based on accounting, then even in the case the employer leases out the car to an employee at a preferential or market price, the tax liability on fringe benefits, nevertheless, arises on the kilowatt-based calculation.
If a car rental company or a lessor leases out a car to its employee as a customer with the rental market price, then the car rental company or the lessor will not have a tax liability on fringe benefits.
Last updated: 03.11.2023
Last updated: 09.04.2024